The role of certification in advancing the sustainable tourism agenda: a case study of the ECO certification scheme in the Wet Tropics World Heritage Area (WTWHA)

Esparon, Michelle C. (2013) The role of certification in advancing the sustainable tourism agenda: a case study of the ECO certification scheme in the Wet Tropics World Heritage Area (WTWHA). PhD thesis, James Cook University.

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Abstract

With the tourism industry expected to double in size over the next decade and given the wide evidence of its negative consequences, many are concerned that future tourism development will be unsustainable. A key tool to help mitigate tourism's negative environmental and social externalities is the certification of tourism products. Certification requires tourism businesses to meet a variety of criteria related to different dimensions of sustainability. It is thus heralded as a key measure in advancing the agenda for sustainable tourism. However, despite the many claimed benefits, to date there is no concrete evidence to substantiate any of those claims, particularly that which claims certification provides economic benefits to businesses: and it is that which formed the focus of this research. Specifically, this study sought to improve our understanding of consumer demand for certified sustainable tourism products (be it tourist demand for certified tourism products, or tourism operator demand for endorsement by a certification provider.

To fulfill this aim, I hypothesised that: 1) certification is multi-faceted requiring a multi-attribute examination; 2) tourist demand depends on their perceptions of certification and its different attributes; and 3) operator demand depends on their perceptions of different attributes of certification and the (perceived) ability of certification to raise revenues (it also depends upon the ability of certification to lower costs, but that complex problem is left as a task for future research). I focused on five objectives, each of which is directly linked to an identified research gap. They are to:

1. Determine if visitors are willing to pay a premium for certified products and to see how an increase in price would impact on operator revenues

2. Improve our understanding of visitors' perceptions about the importance of different attributes of certification (linked to dimensions of sustainability) and about the performance of tourism operators on those attributes

3. Improve our understanding of tourism operators' perceptions about the importance of different attributes of certification (linked to dimensions of sustainability) and about their performance on those attributes

4. Examine the alignment between visitor and operator perceptions on the importance of and performance in different attributes

5. Determine if tourists are willing to pay more for some attributes than for others and if visitors are willing to pay more for attributes which are deemed 'important'

The theoretical background of this research is based on the Lancasterian view of utility which explicitly notes that products have multiple attributes and that it is the attributes of a product (rather than the products per se) that yield utility. As such, if one want to understand the demand for a product (be it certification, or a certified product), one must understand the demand for its attributes.

Information was provided via specific analysis of the ECO certification program, chosen principally for its coverage of multiple domains (attributes) of sustainability. Data were collected from a sample of 610 visitors and 48 operators to the Wet Tropics World Heritage Area (WTWHA), an area known to contain some of the largest concentrations of visitors and operators and with easy, yearround access. The attributes focused on were those which: a) the ECO certification program assessed; and b) were associated with a priority of the Wet Tropics Management Authority. These were: Natural area focus (Nature), Interpretation (Interpretation), Environmental sustainability (Environment), Contribution to conservation (Conservation), Working with local communities (Community), Cultural component (Culture), Customer satisfaction (Customer) and Responsible marketing (Marketing).

A dichotomous choice contingent valuation (CV) approach was used to address objective 1. Specifically, I asked visitors: a) if they would prefer a certified operator at the same price; and b) if they would be willing to pay more for a certified operator. With no difference in price, visitors showed a preference for ECO-certified operators and many visitors were willing to pay more for certification, but, for every price scenario presented, the percentage (%) of visitors not willing to pay a premium exceeded the percentage (%) price increase, implying that a price rise would decrease revenues. Evidently, for operators to sign up for ECO certification and to then charge a price premium (to possibly cover any administrative or operational costs associated with that decision) may not make financial sense, unless operators are able to 1) reduce costs and/or 2) attract new customers.

In the case of the latter, the financially well-off, well-educated, female and the young visitors were found as potential market segments when marketing certified products. These groups of visitors were statistically more likely to express a willingness to pay (WTP) for certified products than others. Moreover, it was found that being 'informed' about certification per se, is not necessarily effective in determining WTP. Instead, it is consumer perceptions about the effectiveness of certification that is most significant.

Furthermore, to attract new customers, operators must understand what consumers most care about and whether this matches with the requirements of certification. But, as noted above, certification is not a simple 'product': it is complex and multi-faceted, encompassing various domains (attributes) of sustainability. Hence to address objective 2, tourists were presented with the list of attributes above, and asked about their perceptions of the importance of those various attributes and their perceptions about the performance of tourism operators on those same criteria. Responses were elicited on a five-point Likert scale. Data were analysed graphically, using non-parametric statistical tests and using a modified version of Importance-Performance-Analysis (IPA).

Results indicate a strong alignment between visitor perceptions about what is 'important' and items assessed by the ECO certification scheme, although key attributes that are held to be particularly important the Wet Tropic Management Authority, were ranked (relatively) low in importance (e.g. Conservation, Environment and Culture).

As to the perceived performance of operators on these attributes, visitors consistently judged the performance of ECO-certified operators to be 'better' than their non-ECO certified counterparts. However, these observations may not necessarily denote actual performance, further validation of these observations is required. Moreover, many attributes are 'invisible', in the sense that efforts made by operators on these attributes are unknown to the visitor. Accordingly, an accurate assessment and depiction of performance cannot be made – although having information about perceptions of performance is nonetheless enlightening.

Important findings also emerged from the comparison of importance and performance. Where significant differences between these two measures existed, ECO-certified operators' performance scores exceeded importance scores. This suggests that customers are more satisfied with ECOcertified products than they are with the non-ECO certified products. As such, ECO-certified operators seem to be effectively competing on non-price factors, a highly desirable outcome in extremely competitive industries such as tourism.

The commercialisation of certified products also depends on operator support, hence the significance of objective 3 which sought to understand operator views on the importance and of their (self-assessed) performance on the various attributes. This was assessed using a similar approach to that used for tourists to also enable examination of the alignment between these two different views (objective 4). The same attributes (Nature, Marketing and Community) where deemed to be the most important to both visitors and operators, indicating that both 'value' the same things. ECO-certified operators self-scored their performance higher than non-ECO certified operators across the majority of attributes – however, no significant differences in performance were found. Nevertheless, according to visitors, ECO-certified operators out-performed their noncertified counterparts on many attributes and these differences were statistically significant.

Tourist WTP for these attributes was also explored (objective 5) using a modified Contingent Valuation approach (developed using insights from choice modeling that allowed a fine grained analysis of product attributes). Across all three products, visitors were more likely to express a high WTP for Community, Environment and Nature. Significantly, visitors' perceived importance of specific attributes aligned well with their stated WTP for the same attributes. From a purely commercial perspective, this identifies the attributes on which operators need to focus most to maximize their benefit from visitors' WTP profile. It also increases the confidence of my conclusions about attributes that are most/least important to visitors.

In line with the aims of this research, it can thus be concluded that despite a WTP for ECO certification, certified operators may not necessarily see an increase in revenue, should they decide to raise prices above their non-certified counterparts. In fact, raising price will impact negatively on revenues since the quantity of customers lost far exceed any potential increase in prices. The wider implication of this finding is that certification schemes may not be able to self-finance. Therefore, a convincing argument for certification as a public good would provide prima facie support for regulation. The next step is to confirm the public good benefits of certification and this requires information on the environmental and social indicators of performance.

Visitors in this research clearly indicated that they perceive certification to be contributing positively to sustainability and in many instances, considered the performance of ECO-certified operators to be 'better' than the alternative. Moreover, the study found that when attributes of certification are considered to be important, visitors are willing to pay for them. The implications of these findings are that consumers have a strong desire for products that are authentically sustainable, they expect certification to make a 'difference' – if they believe certification really can make a 'difference', they are WTP for it. Accordingly, it is vital that certification programs are able to demonstrate credible evidence of its positive impacts if consumers are to fully support it as a measure of sustainability. If this cannot be done, visitors may not choose to purchase certified products, and operators may not choose to be certified. Consequently, the potential benefits of such an important 'tool' for managing the sustainable growth of the industry may never be realised.

Item ID: 31109
Item Type: Thesis (PhD)
Keywords: eco certification; sustainable tourism; tourism certification; visitor perceptions; Wet Tropics World Heritage Area (WTWHA); willingness to pay (WTP)
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Additional Information:

Publications arising from this thesis are available from the Related URLs field. The publications are:

Chapter 4. Esparon, Michelle, Stoeckl, Natalie, and Gyuris, Emma (2013) ECO certification in Queensland's Wet Tropics World Heritage Area: is it good for business? In: Tisdell, Clement A, (ed.) Handbook of tourism economics: analysis, new applications and case studies. World Scientific Publishing, Singapore, pp. 845-869.

Chapter 5. Esparon, Michelle, Gyuris, Emma, and Stoeckl, Natalie (2014) Does ECO certification deliver benefits? An empirical investigation of visitors' perceptions of the importance of ECO certification's attributes and of operators' performance. Journal of Sustainable Tourism, 22 (1). pp. 148-16.

Appendix. Esparon, Michelle, Stoeckl, Natalie, and Gyuris, Emma (2013) ECO certification and tourism operators: marketing and operational issues. Tourism Issues: tourism sciences review, 16. pp. 59-78.

Date Deposited: 26 Feb 2014 23:34
FoR Codes: 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1506 Tourism > 150603 Tourism Management @ 50%
14 ECONOMICS > 1402 Applied Economics > 140216 Tourism Economics @ 50%
SEO Codes: 96 ENVIRONMENT > 9606 Environmental and Natural Resource Evaluation > 960601 Economic Incentives for Environmental Protection @ 34%
96 ENVIRONMENT > 9606 Environmental and Natural Resource Evaluation > 960602 Eco-Verification (excl. Environmental Lifecycle Assessment) @ 33%
96 ENVIRONMENT > 9606 Environmental and Natural Resource Evaluation > 960609 Sustainability Indicators @ 33%
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